"I want the money from my burial reserve account - but I'm not dead yet!"

Question: We've had a request to transfer funds out of a burial reserve account. Our depositor is still alive. We thought a court order was needed to withdraw or transfer funds of an irrevocable burial reserve account when the individual had not died - is this incorrect? Do you have any information regarding transfer of irrevocable burial reserve funds? In the case we have a problem with now, there are individuals transferred from one state hospital to another far away. Up to now, we have always maintained the burial reserve account since the account was first established here. Can you help?

Answer: I'll try. You can transfer funds from a burial reserve account as long as they are in the name of the individual if they are going to another burial reserve account titled EXACTLY the same way at another financial institution. It's just the same type of transfer as an IRA would be. The funds are only being maintained at an institution in another area.

Many banks run into this when individuals have established such an account for themselves, and then relocate to another state when they retire. They will often make arrangements with a local funeral director where they now live. That funeral director may sometimes require that the burial reserve account be maintained locally. It could be your "far away" funeral director has cut such a deal with his or her local state hospital.

By the way, in some states up to $3,000 can be maintained in such an account and that amount is not considered to be part of the individual's assets. The title of such accounts is usually something like "Barbara E. Hurst, Burial Reserve Account, Funds Not To Be Withdrawn Until Presentation Of Death Certificate And Funeral Bill". All of that phrase is part of the title. The named individual does not have to sign the signature card. Upon death the account is closed by your official check payable to the funeral director only, for the credit of your depositor.

Copyright © 2000 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 10, No. 12, 12/00